Kerala High Court
The Choice Foundation vs The Deputy Commissioner Of Income Tax on 25 September, 2018
Bench: K.Vinod Chandran, Ashok Menon
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
&
THE HONOURABLE MR. JUSTICE ASHOK MENON
TUESDAY ,THE 25TH DAY OF SEPTEMBER 2018 / 3RD ASWINA, 1940
ITA.No. 53 of 2017
AGAINST THE ORDER/JUDGMENT IN ITA 467/2016 of
I.T.A.TRIBUNAL,COCHIN BENCH
APPELLANT/S:
THE CHOICE FOUNDATION
CHOICE HOUSE,P.V.SREEDHARAN ROAD,
KUMBALAM,ERNAKULAM,KERALA-682506.(PAN:AAATC 1588 P)
BY ADVS.
SRI.JOSEPH MARKOSE (SR.)
SMT.RACHEL ABRAHAM
SRI.ABRAHAM JOSEPH MARKOS
SRI.CHANDAPILLAI ABRAHAM
SRI.HARAN THOMAS GEORGE
SRI.ISAAC THOMAS
SRI.V.ABRAHAM MARKOS
RESPONDENT/S:
THE DEPUTY COMMISSIONER OF INCOME TAX
RANGE-4,KOCHI,ERNAKULAM,KERALA-682018.
THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 25.09.2018
ALONG WITH ITA NOS.51 & 52 OF 2017, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
I.T.A.51,52&53 of 2017
2
JUDGMENT
Vinod Chandran, J.
The above Appeals were rejected following the judgment of the Honourable Supreme Court in Lissy Medical Institution v. Commissioner of Income Tax [(2012) 348 ITR 344 (Ker)] - Civil Appeal No.5091/2013. The learned Senior Counsel appearing for the assessee, however, brings to our notice the later judgment of the Hon'ble Supreme Court dated 13.12.2017 reported in Commissioner of Income Tax v. Rajasthan and Gujarati Charitable Foundation, [2018] 402 ITR 441 (SC). Hence, we recalled the judgment and reheard the matter.
2. In Lissy Medical Institution (Supra), a Division Bench of this Court had found that when an assessee, a charitable institution, claimed expenditure for acquisition of assets as application of income of the charitable trust for charitable purpose, they were not entitled to claim further depreciation on the same. In the present case, as in the cited decision, a charitable institution acquired medical equipments with surplus I.T.A.51,52&53 of 2017 3 funds available and the expenditure was treated as application of income of the charitable trust for charitable purposes. A claim of depreciation thereafter would not sustain going by the cited decision. The decision challenged before the Hon'ble Supreme Court in Civil Appeal No. 1591/2013 was affirmed.
3. On the very next day, the very same Bench considered a similar issue arising from a judgment of the High Court of Bombay and many other High Courts. The Decision of the Bombay High Court as also the decision of the Hon'ble Supreme Court is reported as Commissioner of Income Tax v. Rajasthan and Gujarati Charitable Foundation (Supra). We herein extract the following paragraphs:-
"After hearing the learned counsel for the parties, we are of the opinion that the aforesaid view taken by the Bombay High Court correctly states the principles of law and there is no need to interfere with the same.
It may be mentioned that most of the High Courts have taken the aforesaid view with only exception thereto by the High Court of Kerala which has taken a contrary view in Lissie Medical Institutions v. CIT.
It may also be mentioned at this stage that the Legislature, realising that there was no specific provision in this behalf in the Income- tax Act, has made amendment in section 11(6) of I.T.A.51,52&53 of 2017 4 the Act vide Finance (No.2) Act of 2014 which became effective from the assessment year 2015- 2016. The Delhi High Court has taken the view and rightly so, that the said amendment is prospective in nature."
4. The aforesaid decision of the Hon'ble Supreme Court is dated 13.12,2017. It is to be noticed that in Lissy Medical Institution's case the learned Judges of the Hon'ble Supreme Court specifically observed that they are not going into the merits of the case. In the later judgment, however the merits were looked into and the claim of the assessee was allowed. It is also specifically noticed that Section 11(6) of the Act has only prospective effect from the assessment year 2015-16. The subject assessment years in the present appeals being prior to the assessment year 2015-16, we have to allow the appeals answering the questions of law in favour of the assessee and against the Revenue. The I.T.Appeals are allowed. No order as to costs.
Sd/-
K.VINOD CHANDRAN JUDGE Sd/-
ASHOK MENON JUDGE I.T.A.51,52&53 of 2017 5 APPENDIX PETITIONER'S/S EXHIBITS:
ANNEXURE- A TRUE COPY OF THE ASSESSMENT ORDER DATED 15- 01-2014 PASSED BY THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION), KOCHI FOR ASSESSMENT YEAR 2011-12 ANNEXURE-B TRUE COPY OF APPELLATE ORDER DATED 15-6-2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-III, KOCHI ANNEXURE-C TRUE COPY OF APPEAL DATED 29-09-2016 FILED BY THE APPELLANT BEFORE THE APPELLATE COURT ANNEXURE-D TRUE COPY OF IMPUGNED COMMON ORDER DATED 24- 1-2017 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH FOR ASSESSMENT YEARS 2009-10, 2010-11 AND 2011-12